Net Metering: A Primer

One of the most common questions about solar power is: “What happens at night?” Here’s another: “What happens when it’s cloudy?” Thanks to net metering, the answer to both is that the lack of sun doesn’t affect your ability to draw energy. Not only does net metering effectively keep the power going even when the sun isn’t shining, it can also help to lower overall energy costs.

Here’s how it works:

When solar power equipment is installed, you’re connected to the power grid. When the solar panels produce more energy than is needed on-site, the excess electricity is sent back to the grid — and you receive a credit for it from the utility. Then, when the solar panels are producing less than what’s needed, you draw power from the grid and get charged against the credits already accumulated.

Think of it this way:

When you’re putting excess energy into the grid, your meter runs backwards. When you’re taking from the grid, your meter runs forward. The bill at the end of the month is the “net” of that activity.

This essentially means that businesses can utilize the clean energy produced whenever they want — even if it’s nighttime, cloudy, etc.

And because every unit of unused clean energy produced by your solar array gets “counted” by the grid, you stand to save significant money over the life of your solar equipment by offsetting the need for electricity from the power company.

Net metering was created to encourage the adoption of solar power, and also to help create new, green energy resources during the times of highest strains on the power grid (which is often when it’s hottest, and, coincidentally, when sunlight is most abundant). If more solar arrays put more energy into the grid, there’s less need to find that energy from other sources — like fossil fuels.

Businesses can utilize the solar energy produced whenever they want — even if it’s nighttime, cloudy, etc.

A company with a solar installation and net metering — often called a “behind-the-meter” system — can therefore save money and take a significant step toward sustainability.

Net metering can also be paired with on-site solar energy storage systems (ESS). In this case, the excess energy produced by the solar installation is first used to charge the battery … and, when the battery is fully charged, the extra power then goes to the grid. This option can potentially bring with it several benefits, like net energy metering paired storage, which allows you to discharge the battery into the grid when the energy price is strong, thereby maximizing energy credits.

Options and policies regarding net metering differ from state to state, so it’s important to explore the possibilities in each location. Thirty-eight states plus Washington DC have mandatory net metering policies, but most states without a mandate have voluntary policies offered by the power companies. Solar service providers will help with understanding local rules and regulations to find the installation that’s best for your needs.

Database of State Incentives for Renewables & Efficiency® Interactive map.

Net metering provides a solution to several fundamental concerns about commercial solar power. As you explore solar power options for your business, make sure to discuss the local possibilities with your provider to maximize the benefits of energy production.

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